BERLIN, (Reuters) – Porsche wants to restore its profit margins with the help of deep-pocketed sports car fans, while shrinking the company in line with lower sales volumes.
Here are the main aspects of the Stuttgart-based carmaker’s turnaround strategy, presented to investors at a capital markets day on Wednesday.
FINANCIAL TARGETS
– Porsche set its long-term target for a group operating margin of 15%. In the medium term, meaning roughly within five years, it is aiming for a range of 10% to 15%. This follows 1.1% in 2025.
– The company is targeting an automotive net cash flow margin of 9% to 12%, with a long-term strategic target of 12%.
– The company aims for a break-even point of 200,000 units, cementing a departure from previous sales volumes after 2025 deliveries amounted to 279,449.
PRODUCT OVERHAUL
– Under a “value over volume” strategy, Porsche will expand its offering in higher-value segments while reducing the number of model variants across its portfolio by about 20%. This is expected to increase the sales volume per model by 30% in the medium term.
– Porsche is sticking to a three-pronged powertrain approach, investing in combustion engines and plug-in hybrids, as well as battery technology. This formally ends an EV strategy paused under former CEO Oliver Blume, in a strategic U-turn that cost the carmaker and its parent Volkswagen nearly €7 billion ($7.86 billion).
– The all-electric 718 Boxster and Cayman models are expected to support sales from their first full year of production in 2028. The company also plans to unveil a new compact SUV next year, whose contribution to sales and profitability should be felt from 2029.
– Porsche is considering a new luxury SUV positioned above the Cayenne.
– By 2030, Porsche plans to launch at least one “brand-defining new product” every year, it said.
CUSTOMISATION AND SPORTS CARS
– Through an expansion into high-end segments and greater customisation options, Porsche aims to increase the average selling price of its top-of-the-range models by about 20%. Sales from the customisation business are to increase sixfold.
– Porsche CEO Michael Leiters confirmed there will be no electric 911.
– The company proposed a mid-engined super sports car architecture for the future, which could enable a model line above the 911.
– Porsche also said it would raise its stake in German racing team Manthey Racing GmbH to 67% from a current 51%, to strengthen performance kits for its road-going models.
COST SAVINGS
– Porsche plans to reduce its personnel costs in production by up to 30% in the medium term, on top of 10% savings linked to the company’s ongoing redundancy programme. Management positions will be reduced by 40% in the medium term.
– Porsche aims to reduce development costs for future model lines by up to 20%. Among other things, this will involve greater platform-sharing with fellow Volkswagen brand Audi.
– Changes to the sales structure, including reducing the number of regions to four from five, aim to lower sales and distribution costs by 20%.
($1 = 0.8909 euros)
Reporting by Rachel More and Ilona Wissenbach Editing by Tomasz Janowski
